Japanese Prime Minister Junichiro Koizumi and Mexican President Vicente Fox recently signed the Agreement for Economic Association Mexico-Japan. It falls far short of a free trade agreement and is the result of three years of haggling between negotiators.
A problem for Japan is that Mexico, under Fox, has not undertaken "the necessary reforms" Mexico needs to fully exercise free trade with Japan. Specifically, that means divestment of many state-owned operations, particularly in the oil industry.
The Mexican government needs to delegate growth responsibility to private enterprise, says Koizumi. Still, the agreement paves the way for technology transfer and increased Japanese investment in Mexico. Strewn along the negotiation trail are Mexico's hopes of exporting rice and pork, among other food products, to the Japanese.